When Referrals go wrong

When a client refers you on for business, that’s great isn’t it? Well maybe, but read on for some potential pitfalls

1) The attractively priced client.Your client was your first client. You quoted them what is now unrealistically low pricing to secure the business. They love you and want to help you grow your business.

Whoops: They get a new neighbour. After hitting it off, this new busines says he needs a local provider. Your client says great things about you and explains how much they pay. “I’m sure they will give you the same pricing.”

2) The needy client.We want clients who want more and you are happy to provide that extra service to your favoured clients. Your good client refers a friend who is incapable of making a decision and reacts to everything she reads on social media.

Whoops: You now have a client who emails every time something is posted that might affect her business. She needs her hand held before, during and after – all the time

3) The serial client.One of your clients meets a woman at a party who mentions she is parting ways with her current provider. Could he recommend a good alternative? He volunteers your name. Your client thought it impolite to ask what was wrong with her last provider.

Whoops: This person has unrealistically high service expectations coupled with a desire to pay as little as possible. She expects every call to be returned in 15 minutes. It’s all your fault. She has unnamed friends with unnamed competitor providers who make more money and pay nothing. It’s an adversarial relationship until she leaves.

4) The specialist.Your client owns a medical practice. You go above and beyond the usual service. It’s a great relationship. Your client thinks you know everything. She has an uncle who runs an international shipping company. He sends packages around the world. Your client says, “No problem. My XXX in an expert.”

Whoops: Your client needs a firm with specialised skills. You need to explain this to her uncle, possibly putting his niece in a difficult position because she overpromised.

5) The litigant.One of your golf friends refers a potential new client. Although he isn’t a lawyer, he thoroughly embraces the legal profession. His upstairs toilet leaked, so he wanted a new kitchen from his insurance company. He slipped on the ice in front of a coffee shop. He feels the owner bears the responsibility for keeping the pavement clear. He recently sued his accountant.

Whoops: This person thinks everything is someone else’s fault. He sees legal action as his path to wealth. No one is immune. Even relatives don’t have him visit anymore. Might he sue his new provider?

6) The small client.Your business has evolved from doing just the small stuff to now handling larger, more profitable clients. One of your large clients sends a new client of theirs to you. The first words out of his mouth are: “I only want………….”

Whoops: You might make an exception and take him on as a client. He might refer more of the same business. Otherwise, you must refer him elsewhere, explaining your business is now handling larger accounts. This might reflect badly on your large client.

Would you take on any of these clients? Probably not. However, you are in the awkward position of needing to tell this person the bad news, possibly putting your referring client in an awkward position. Will he or she refer the right people next time?

The solution is to let your existing clients know the type of people you are best positioned to help. Keep in regular touch, not just for business. Make time to chat and update one another on the current aims of your business and your future plans. It’ll make his job much easier passing referrals.